Recently received an inheritance…

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Sorry for your loss. First of all, pay off the student loans, that interest is high. Not related to the inheritance but you need to refinance that mortgage, 4.3 is very, very high nowadays. Following that, look at the windfall section of the wiki and follow that advice.


You should seek out professional advice. This is the type of thing that requires an hour or two of discussion with someone who actually understands your situation (goals, family, tax, retirement, risk tolerance, debt, etc) and actually understands how to put those moving parts together. This sub is not that. Find a CFP that is a fiduciary, make sure you understand how they are compensated, and sleep on any proposed suggestions they offer you.


Forget paying off the mortgage, if anything push it out even more by refinancing at a low interest rate while you still can. Unless you happen to live in an area where real estate prices are going up faster than stocks then it makes no sense. Best bet is probably to pay off the student debt and car loan and put the rest into a broad market ETF (s&p 500, nasdaq, vanguard total stock market, etc). They go up well with the economy and also you can easily get the money back when you need it within minutes.


Sorry you lost someone close to you. I’m not so good with the financial advice. Good luck!


Who’s inheritance? In many states in the US (I’m assuming US), the inheritance is not joint property until it’s made joint property. Because my wife has been a jobless SAHM for 30 years, when she gets an inheritance I will encourage her to keep it separate. Look at Dave Ramsey… his suggestion would be (in order): 1. pay off all your debt other than the house 2. create a properly funded emergency fund of 3-6 months of expenses 3. 15% to retirement 4. save for kids college (as you two are led to) 5. pay off the house I’m a big fan of 529s. We’ve been married for 30+ years, so we’ve used 529s. Two kids have graduated college, and one is still in college. Our strategy was to save enough to pay for the kids to live on campus at StateU. Not Harvard. We saved extra into taxable investments I keep separate but consider part of college savings. But our story to the kids was they could count on their 529, but if they needed more, “we’d have to talk.” Personally, I don’t buy the rationale behind keeping the mortgage to invest. Yes, that’s a big spread today (my 401k is up 21% YTD), but these are unusual times and who knows when the current market will turn back to a more typical market. IRAs become inherited IRAs. Assuming the decedent died this year or last, you have to pull the money out within 10 years and pay regular income tax on what you pull (I’m not sure what happens with Roth IRAs, frankly.) You’ll want to be careful on how you pull from the IRAs to minimize taxes… if you pull everything out at once you might find yourself paying 40% income tax that year. What you need is a strategy. We got a windfall (stock option payout upon corporate takeover) a number of years ago. We got all cash. We kept it in cash for a while, but eventually we decided on percentages. Here’s an idea: * 10% to give away * 30% to fund kids college * 30% to save * 30% to pay off debt. (this is an example. Don’t roast me if 30% of 500k is more than all your debts. It’s an example). Then get more specific with each category. What charities for the giving? What types of saving and or investing for that 30%. Do you pay off the car and student loan now, but save the rest of the debt category to pay off the house more slowly? I didn’t have a “spend” category. I should have. I’d add it but I don’t want to come up with a different arbitrary set of percentages. Maybe treat yourself to a brand new car. Maybe a big trip. One other thing to consider: what would the decedent tell you to do? What would make him / her smile, knowing that you’re doing …….. ? I got a small inheritance when my mother died. It was in the form of a retirement annuity that I rolled into a pre-2020 inherited IRA (so I take RMDs). When I graduated college, she gave me some stock and told me it was God’s chance to make me rich. It didn’t. But I remembered that, so when we got the small inherited IRA, I found the craziest managed mutual fund that Vanguard offers (and vanguard is not known for crazy mutual funds, is it?), and put it in there. So it’s sort of a cross between my mother’s wish for the stock and how I invest. It’s done well.